The Best Practices Guide: The Big Draw
A well-designed retirement program helps attract and retain employees
Janet Owens is a walking advertisement for North Island Credit Union's retirement program. "I've been with North Island for 30 years and will be able to retire early at age 55 because of our great retirement program," says Owens, the credit union's vice president of benefits and welfare.
The credit union's retirement program includes a generous 401(k) plan with immediate vesting, a Roth savings option and a defined benefit pension plan. The program targets 80 percent income replacement—without Social Security.
North Island makes using their retirement benefits easy with several do-it-for-me tools, including automatic enrollment. The automatic enrollment is set at a level that allows employees to get the full employer match. (The credit union's generous match is 100 percent on the first two percent of pay deferred, then 50 percent on the next four percent of pay deferred.)
And thanks to North Island's extensive communication—including mandatory meetings for new participants and a financial planner for all employees—10 percent of participants increase their deferral every six months.
Once employees are in the 401(k) plan, lifecycle funds and managed accounts make it easier for them to manage their investments. According to Owens, "Employees seem to feel more secure having a professional money manager rather than creating their own portfolio, especially when they're just starting out in the plan."
North Island uses regular surveys to gauge employees' understanding of the program. They then plan educational meetings based on the survey results.
Owens is confident their efforts pay off for the organization. "Definitely our retirement plan gives us an advantage," she said. "The comment most often heard by our recruiter during interviews and new employee orientation is that they can't believe our retirement program."
"Employees seem to feel more secure having a professional money manager rather than creating their own portfolio."
– Janet Owens, vice president of benefits and welfare, North Island Credit Union
What can you learn from North Island Credit Union?
- Setting the auto enrollment deferral at the level of the maximum company match helps employees take full advantage of the program.
- Auto enrollment can make retirement plan administration easier.
- Immediate vesting encourages younger employees to start saving sooner.
About North Island Credit Union
Find out more about their benefits in North Island Credit Union's winner profile.
